Tuesday 28 February 2012 11.19 EST
First published on Tuesday 28 February 2012 11.19 EST

Corporate philanthropy towards arts and culture dropped by 7% last year to a level lower than in 2004/05, according to new figures.

The campaigning charity Arts & Business released preliminary statistics before a full report due out in two weeks' time. The most striking bad news is the fall for the fourth year in a row of business investment in the arts, down to £134.2m, as well as the growing gap in fortunes between London and other regions.

But there were more positive figures published, not least an overall 4% growth in total private sector investment to £686m. That includes a 10% increase in funding from trusts and foundations and a 6% increase in private individual philanthropy which reverses a decline in the previous two years. The figure for individuals in 2010/11 was £382.2m, higher than it has ever been.

On the face of it, the figures would seem to be disappointing for the culture secretary, Jeremy Hunt, who has made boosting private giving to the arts a central tenet of the coalition's arts policy. He declared 2011 "a year of corporate philanthropy".

But Hunt drew the positives from the figures. He said: "This confounds the critics who said it was a waste of time trying to boost philanthropic giving when times are tough. It is also a real tribute to the determination of the cultural sector to boost its fundraising and strengthen the financial resilience of arts organisations. We now just need to keep going – particularly exploring the opportunity of legacy giving for which a new tax break comes into force this April."

The Labour shadow arts minister, Dan Jarvis, warned: "The government promised that cuts in public funding for the arts would be replaced by philanthropists' generous donations across the country. We can see that this simply hasn't happened. Whilst private giving has increased by £28.5m in 2011, the public funding to Arts Council England was cut by £71m. This is deeply worrying for the long-term sustainability of the arts sector.

"Today's news is not reason for Jeremy Hunt and Ed Vaizey [the arts minister] to celebrate and pat themselves on the back. Arts organisations across the country are still very unsure about what their futures will look like and we continue to have a lack of arts organisations in some of the most deprived areas of the country."

The figures disclosed that 81% of all individual giving goes to organisations in London. Arts outside the capital are being hit hardest, often facing the added blow of suffering cuts to local authority grants.

While London saw a 9% increase in private-sector investment to £488m and the north-west was up 3% to £21m, almost everywhere else suffered a fall. The south-west was down 32% to £15m, the south-east down 14% to £28m, the north-east down 13% to £12.1m, and Yorkshire down 12% £16.2m. Scotland saw a 13% rise to £47.1m.

Philip Spedding, the campaign director of Arts & Business, said: "There are distinct variations across the country, but overall the arts world has continued to respond to the cold economic climate in a positive and successful manner. The downward trend on business support for the arts remains our prime concern. However, we are beginning to see some in the arts discovering other productive ways to work alongside business, and our role remains to develop, sustain and celebrate these new ideas and models.

"It remains to be seen whether private investment is set to become the dominant funding force of UK culture. What we are seeing is through the adoption of new fundraising and digital channels, arts bodies and individual artists across the UK are capitalising on the unquestionable opportunities that exist for the arts in communities, in the pursuit of creativity and in the delivery of enterprising sponsorships."